Warren v. Williams , 52 Me. 343 ( 1864 )

The opinion of the Court was drawn by

Davis, J.

Royal Williams and Eben McLellan were doing business as partners, under the name of Williams & McLellan, in 1851. In March, April, and May, of that year, they gave several promissory notes, payable in four months; and in June they failed. Some of these notes were purchased by the plaintiff in 1854, and were put in suit in 1857.

June 16, 1851, about the time of the failure, Royal Williams conveyed the premises in controversy to his son, the present defendant. The plaintiff recovered judgment in his suit upon the notes, November 19, 1859, and caused his execution to be levied thereon, claiming that the conveyance to the son was fraudulent and void as to the creditors of the father. And he has brought this writ of entry, to recover possession.

At the trial, there was evidence that, at about the same time, Williams & McLellan conveyed all their property, whether owned by the firm, or by the partners separately, to different persons — but principally to the father of one, and the son of the other. Some of the real estate so conveyed was afterwards sold for their benefit; and they subsequently received a ¡Dart of the earnings of some vessels conveyed by them at the same time.

No declarations of Royal Williams, made after his conveyance to the defendant, would have been admissible. Clark v. Waite, 12 Mass., 439; Aldrich v. Earle, 13 Gray, 578. No such declarations were admitted in evidence. The ruling of the Court was, "that any evidence of the subsequent disposition of the property, conveyed by Royal Williams or Williams & McLellan about the same time of the conveyance in controversy, for their benefit, or for the benefit of Royal Williams, or that they subsequently received the earnings or-proceeds thereof, would be admissible.”

This ruling involves the question of the admissibility of evidence that the debtor conveyed other property, at about the same time; and of proof that such other conveyances were fraudulent, by showing that such property was subsequently disposed of or used for his benefit.

1. The proof of other fraudulent conveyances, made about the same time, has always been held admissible in this class of cases. Flagg v. Willington, 6 Maine, 386. "The proposition to be established by the attaching creditor who seeks to vacate a prior conveyance on the ground of fraud, is, (1,) that the grantor made his conveyance with the intent and for the purpose of defrauding his creditors; and, (2,) that the grantee knew of this intent, and participated in it. These propositions are in some measure independent of each other. And the evidence to prove them may be of different kinds, and drawn from different sources.” Foster v. Hall, 12 Pick., 89.

The other conveyances are proved as evidence of the intent of the grantor. It is not necessary, therefore, to show that the grantee had any knowledge of them. It is sufficient if he knew that the particular conveyance to himself was made with such intent. So it was expressly held in the case cited. Evidence of other conveyances is not admitted to show the intent of the grantee; and therefore his knowledge of them is immaterial. It is admitted to show the intent of the grantor, and is important for that purpose. If a debtor conveys any of his property to defraud his creditors, he must convey the whole of it not exempted from attachment, or his purpose would not be accomplished. One such conveyance, therefore, tends to show that any other conveyance, made about the same time, was made for the same purpose. Howe v. Reed, 10 Maine, 515; Taylor v. Robinson, 2 Allen, 562.

The knowledge and participation of the grantee in the fraudulent design of the conveyance to himself, is generally proved by other testimony. No question is raised upon this branch of the case. The exceptions find that other appropriate instructions were given.

2. When other conveyances are proved, how can they be shown to have been fraudulent f The declarations, or the general acts of the grantor,' subsequent to the conveyance, are not admissible. His admission, though evidence against himself, if he were a party to the suit, is not evidence against his grantee. It is but the declaration of one, not under oath, nor in Court, who may be admitted as a witness.

But evidence of the subsequent dealings of the grantor with the property conveyed, stands upon a different basis. These are acts in pais, directly affecting the grantee or vendee. But subsequent possession and use by the vendor not only show his intention; they show the intention of the vendee also, whose assent is presumed. Rollins v. Mooers, 25 Maine, 192. This is but a negative way of proving that the vendee did not, after the alleged sale, assert and exercise the rights of an actual, bonci fide owner. The continued exercise of such rights by the vendor, after the sale, unless explained, has always been held strong evidence of fraud, as against both of the parties. Allen v. Wheeler, 4 Gray, 123; Homes v. Crane, 2 Pick., 607.

The evidence that some of the property sold by Williams & McLellan about the same time of the conveyance in controversy,, was subsequently disposed of for their benefit, and that Williams afterwards received some of the earnings of the vessels then sold by them, was clearly admissible, in order to show that those sales were fraudulent. For, if other fraudident sales were made, about the same time, then, as we have seen, the sale to the defendant, if attended with the same badges of fraud, may be presumed to have been made for the same purpose. The ruling on this point was correct.

The Court was requested to instruct the jury that, if the conveyance was made "for a valuable consideration, and the plaintiff, at the time of such conveyance, was not a creditor of Williams, then he cannot impeach the validity of the conveyance on the ground of a fraudulent intent by the grantor and grantee.” This was not given; but the jury were instructed " that the notes having been giveu before the conveyance, though not purchased by the plaintiff until after-wards, he was such a creditor as could impeach the conveyance on the ground of fraud.”

By the statute 13 Eliz., c. 5, all conveyances made "to delay, hinder, or defraud creditors and others of their lawful actions, suits, debts, accounts, damages,” &c., were made void, "as ag'ainst such person or persons, his or their heirs, successors, executors, administrators, and assigns, whose actious, &c., by such fraudulent devices and practices are, shall, or might be in any way disturbed, hindered, delayed, or defrauded.”

The design of this statute was to make such conveyances void as against all persons, or demands, liable to be affected thereby. The right to hold them void was not merely personal. The creditor could hot treat them as void, except as to his demands, or suits. Upon payment, or after a transfer of his claim, he, personally, could no longer impeach the conveyance on the ground of fraud.

But, as to the "demand,” or any "suit” thereon, until paid or discharged, such a conveyance was "utterly void.” The debt, whoever might become the owner of it, could be enforced against the property, the same as if it had not been conveyed. The conveyance was void as against the person intended to be defrauded, and his heirs, successors, executors, administrators, and assigns, if their actions, suits, debts, &c., were liable to be delayed or hindered thereby. That this embraces a suit brought by the subsequent purchaser of a preexisting note, there can be no doubt.

The jury returned a special verdict, that the conveyance to the defendant was "without consideration.” Upon this point there is. a motion for a new trial, on the ground that the finding was irregular, and w;as against the evidence in the case. But the demand having been an existing one at the time of the conveyance, if it was fraudulent, it is immaterial whether it was voluntary, or for a valuable consideration. In either case it was void. The special finding, whether correct or not, could not have affected the result, or injured the defendant.

The exceptions and motion are overruled.

Appleton, C. J., Cutting, Walton, Dickerson and Barrows, JJ., concurred.